Valhi (VHI) Stock Forecast & Price Target

Valhi Inc. is anticipated to experience a substantial rise in EBITDA, projected to grow at a 37% compound annual growth rate (CAGR) from $25 million in fiscal year 2025 to $47 million by fiscal year 2027, while also witnessing an increase in EBITDA margin from 24.2% to 30.1% due to operating leverage. Additionally, Valhi's earnings per share (EPS) are expected to increase by 23% over the next 12 months, significantly outperforming peers within the Canadian software consolidator market, which have expected growth rates of 12% and 13%. The company's strong performance is underpinned by robust revenue generation from its Chemicals segment, particularly through value-added titanium dioxide pigments, establishing a solid foundation for future profitability and growth.

Valhi Inc. is facing significant financial pressures, particularly within its Attend Anywhere platform, which has experienced a drastic revenue decline of 57% over the past two years, reaching only £5.0 million in FY25 due to competitive threats and pricing pressures from the NHS's shift to usage-based pricing. Additionally, the overall productivity of the NHS has notably declined, remaining 11% below pre-pandemic levels, which further exacerbates challenges for revenue generation in related segments. Furthermore, a concerning drop in EBITDA margin from 26.4% in Q2/FY25 to a projected 21.5% in Q3/FY25 indicates potential instability, despite expectations for a gradual recovery over the subsequent year.